Page Comparison

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1. Exercise the Option as usual

   • This moves the Option’s full cost to a new position in the original equity underlying

2. Book free receive for spin-off security

   • Cost Type (24) = Trade "F"

   • Quantity/Current Face (40): calculate number of child security shares to be received as # of Option Contracts * Contract Size * Spin-Off Ratio

   • Price (45): calculate the unit cost for spin-off security including both the equity cost and portion of the option premium in accordance with settlement allocation terms

     • Price = ((Equity Cost + Option Premium Cost) * Settlement Allocation % for Spin-Off Security) / # of Spin-Off Security Deliverable shares

   o

   • • • Equity Cost = # of Option Contracts * Contract Size * Strike Price * Price Multiplier

   o

   • • • Option Premium Cost = # of Option contracts * Contract Size * Option Trade Price * Price Multiplier

3. Process cost adjustment on the new position in the original equity underlying equal to the cost used in step Step 2. b. for the spin-off security

   • If you do not already have one set up, you will need to add a code value to the REC_DEL_ACCTS code category that offsets to the same memo account used by the free receive

     • The Long Description can be set to anything, but the Short Description must be 9333333334 (this is memo account TRANSFER OF ASSETS)